BMW has signed Samsung SDI and LG Energy Solution as battery cell suppliers for its sixth-generation high-voltage batteries, the German carmaker said on Tuesday, splitting the work by region: Samsung SDI will feed BMW's European plants and LG Energy Solution its U.S. operations. The companies did not disclose the value of the contracts or the volumes involved, and deliveries are expected to start in the late 2020s, The Korea Herald reported.

For investors in Korean battery stocks, the deals matter less for their near-term revenue than for who else is on the list. In Europe, Samsung SDI joins China's CATL and EVE Energy as a BMW cell supplier, according to The Korea Herald. Both Korean companies have leaned on energy storage orders for growth this year. A premium German carmaker adding two Korean names to a supplier base that already includes Chinese producers gives the sector a fresh foothold in the vehicle business it was built on.

BMW's "local for local" battery plan

Both Korean companies will deliver from production sites in the regions they serve. BMW calls this its "local for local" strategy: buying key components close to where it assembles battery packs and builds cars.

The carmaker has set up five new high-voltage battery assembly sites next to its vehicle plants, The Korea Herald reported. They are in Irlbach-Strasskirchen in Germany, Debrecen in Hungary, Shenyang in China, Woodruff in South Carolina and San Luis Potosi in Mexico. Cells arrive at these regional sites and are assembled into packs for BMW's electric models.

Nicolai Martin, the BMW AG board member responsible for purchasing and the supplier network, said in the company's statement that "diversifying procurement is an integral part" of BMW's purchasing strategy. He added that the cell partnerships would strengthen value creation in Europe and the United States. Hendrik Lang, BMW's head of high-voltage battery purchasing and quality, said working with leading cell makers around the world would help secure supply that is resilient, flexible and competitive.

The split also tracks where each Korean company has built capacity. LG Energy Solution has a large North American footprint, including a joint venture with Honda, while Samsung SDI recently secured an LFP battery project for EVs in Europe and expects U.S. electric car demand to stay weak in the near term.

Samsung SDI and LG Energy Solution come off strong quarters

The BMW contracts land less than two weeks after both companies reported their best results in years, driven mainly by batteries for power grids and data centers rather than cars.

LG Energy Solution said on Nov. 3 that third-quarter sales rose 59% from a year earlier to a record 9.64 trillion won ($7.2 billion), and operating profit climbed 25.7% to 756 billion won, according to The Korea Times. That figure included 417 billion won in North American production incentives. The company raised its full-year revenue growth target to 35% to 40%, from an earlier forecast of mid-teens to 20%, and kept its goal of a mid-single-digit operating margin.

Chief Financial Officer Lee Chang-sil credited a sharp rise in energy storage system (ESS) shipments along with higher volumes of EV pouch and cylindrical cells. Better use of its plant in Poland also helped. The company expects fourth-quarter sales to grow about 10% from the third quarter, with ESS shipments up 40%. It warned that profitability is likely to soften as one-off gains fade and new ESS capacity at the Honda joint venture adds early fixed costs. LG Energy Solution said most of its planned supply through 2028 is already committed.

Samsung SDI swung to a third-quarter operating profit of 407.8 billion won from a 591.3 billion won loss a year earlier, its highest since the third quarter of 2023, The Korea Times reported. Revenue rose 52.6% to 4.69 trillion won. The company said it had won more than 60 gigawatt-hours of ESS orders this year and had begun mass production of prismatic lithium iron phosphate (LFP) cells at its StarPlus Energy plant in the United States. It expects European EV battery demand to rise in the fourth quarter.

What the BMW deals do and do not change

Because no values or volumes were given, analysts and investors have little to plug into earnings models yet. The contracts start in the late 2020s, after the current wave of ESS-driven growth that is lifting both companies' numbers.

What they do offer is diversification on the vehicle side. Energy storage has carried Korean battery earnings this year, but it is a market where Chinese LFP producers compete hard on price. Long-term supply with a European premium brand, delivered from local plants, gives Samsung SDI another anchor for its European capacity and LG Energy Solution more use for its U.S. lines.

LG Energy Solution is also pushing into battery software and services. On Monday it said its AI-based diagnostic tool, Re.Pulse, won a CES 2027 Innovation Award for cutting the time needed to assess used batteries from more than seven hours to under 10 minutes, The Korea Herald reported. The company is building a battery-as-a-service business around diagnostics and end-of-life handling.

The next test for both suppliers is the fourth quarter, when LG Energy Solution has guided for a 40% jump in ESS shipments and Samsung SDI aims to finalize long-term supply agreements for utility-scale storage within the year.